FIRST MILK and Dairy Farmers of Britain are to pool their milk collection and distribution activities in a new company as part of a push for £12m annual savings.
The Milk Industry Logistics Company will take over the haulage of milk for the two co-ops on Dec 1, shifting up to 4.6bn litres of milk each year.
The move follows the establishment of close co-operation in January, when the two groups started to tender for milk jointly with the aim of eliminating duplicate tanker journeys.
The new company will function as an independent joint venture, fully owned by First Milk and DFoB, and although it will be commercially driven and geared towards growth, MIL‘s owners say that farmers will benefit too.
“We are not there to make profits, so any profits made will be returned to members,” said Mike Stevens, membership director at DFoB.
“Ultimately the farmers have to carry the cost of transport, so it‘s completely in their interests.”
Haulage is the biggest cost facing the two co-ops, besides the cost of the milk itself, and each spends in the region of £80m each year, according to First Milk‘s Jeremy Hamilton.
There are hopes that the independence of the new company will encourage others to outsource their tanker business.